Website FAQ: Municipal Wheel & Excise Tax (Ordinance 2025-18)

On August 25, 2025, the Ellettsville Town Council adopted Ordinance 2025-18, creating a Municipal Wheel Tax and Excise Surtax. Starting January 1, 2026, the tax will generate about $89,773 each year—dedicated to road repair, maintenance, and securing state matching funds through the Community Crossings Grant program.

“This is about being good stewards of our roads and resources,” 

– Ellettsville Town Manager Mike Farmer

Here’s what it means for you:

Q: What did the Town Council approve?

A: A new Wheel & Excise tax was passed on August 25, 2025 that helps fund local road improvements. The estimated annual revenue is $89,773.

 

Q: How much are the taxes?

A:

  • Excise Surtax: $15 per eligible vehicle

  • Wheel Tax: $5 per eligible vehicle

Q: Which vehicles pay the Excise Surtax?

A: Passenger vehicles, including:

  • Cars

  • Trucks

  • Motorcycles

  • Motor Driven Cycles (mopeds)

  • Trailers

Q: Which vehicles pay the Wheel Tax?

A: Larger plated vehicles, including:

  • Trucks

  • Trailers

  • Semis

  • Buses

  • Recreational Vehicles (RVs)

Q: Are there any exemptions?

A: Yes. The tax does not apply to vehicles that are:

  • Owned by the state or a state agency

  • Owned by a political subdivision

  • School buses

  • Buses owned/operated by a religious or nonprofit youth organization

  • Motor vehicles used as funeral equipment

Q: Is this a tax per wheel?

A: No. The Municipal Wheel Tax is applied per plated vehicle, not per wheel.

 

Q: Would a vehicle pay both a Wheel Tax and an Excise Surtax?

A: No. Each tax applies to different categories of vehicles, so no vehicle will be charged both.

 

Q: How will the revenue be used?

A: All funds are deposited into a dedicated “Municipal Wheel Tax Fund.” By law, this fund may only be used to:

  • Construct, reconstruct, repair, or maintain streets and roads under the town’s jurisdiction

  • Serve as the local contribution to secure matching grants from the Local Road and Bridge Matching Fund

 

Q: Why was this tax necessary?

A: Without a local Wheel Tax, Ellettsville would be ineligible for the full amount of state funding through the Community Crossings Grant program. With the Wheel Tax in place, the town can continue securing hundreds of thousands of dollars in matching funds for paving and road maintenance. Since 2015, Ellettsville has received $1.86 million from the state to pave and maintain local roads.

Q: Who manages the revenue?

A: All revenue goes directly to the Town’s Streets Department to ensure roads are cared for. The Town has kept the tax rates as low as possible while still maintaining eligibility for grants and preserving road quality.

Q: When will the tax go into effect?

A: January 1, 2026



Additional Questions? Please contact the Town of Ellettsville or attend an upcoming public meeting to learn more about Ordinance 2025-18.